The explanation of why zero pure play open source vendors have hit the one billion dollar revenue mark has never seemed, to me, particularly complicated. The economics of open source are fundamentally differentiated from the closed source models that preceded it.

IDC is out with a new report forecasting Linux revenue from 2009-2013. According to a post on the data, from Novell CMO John Dragoon, in 2008, the Linux vendor community saw a 23.4 percent growth in revenue.

In a time when Microsoft is feeling the full impact of the global economic downturn, the open-source Linux operating system is flourishing.

If I were to ask you what the world’s most largest open source firm was, how would you answer? Red Hat, perhaps, because they’re the first pure play to get within hailing distance of a billion in revenue? MySQL, because they were valued at a billion? IBM? Sun?

The use of open source environments for enterprise software projects is growing at an unprecedented rate, with notable peaks of interest among financial services and public sector organizations. Indeed, the adoption of open source software is growing at a great clip, with worldwide revenue from standalone open source software having reached $1.8 billion in 2006, according to recent calculations from IDC. That figure is expected to reach $5.8 billion by 2011, representing a compound annual growth rate of 26 percent. As a result, IDC is calling open source "the most significant, all-encompassing, and long-term trend that the software industry has seen since the early 1980s."

Based on the run rates of the current quarter, Red Hat will likely reach $1 billion in annual revenue in 2011. Only a handful of companies, probably less than 20 software firms, have ever hit this milestone

Talk about FUD. I came across a release this AM titled, "Free Open Source Software Is Costing Vendors $60 Billion," New Standish Group International Study Finds".

I couldn't help think that question this morning when the news came through from the US that Microsoft will increase its R&D spend by $US1 billion bringing its total to $US9.1 billion every year.

I saw that Jim Whitehurst, Red Hat's new CEO, is gunning for $1 billion in revenue within the next three years. Given that Red Hat did $400 million in 2007, up from $278 million in 2006, this is perhaps not all that surprising of a goal.